Dear Editor,
I am pressed to respond to the “analysis” of a certain Joel Bhagwandin who, like the PPP more broadly, seems tragically unaware that Guyana is an oil producer with skyrocketing production. His recent defense of the government’s 6.5% salary increase for public servants was as predictable as it was flawed. How his “analysis” could exclude oil revenues, when that is a central reason the government budget has skyrocketed, is beyond me. Public servant salaries, like so many other topics in Guyana, must be viewed in the context of our changing economic landscape. The oil industry is central to that landscape.
Was it so long ago that the GRA complained its auditors were being poached by oil companies? Was it so long ago that pay was cited as a critical constraint? Just recently I spoke to a young woman who had quit her ministry job to work in the oil industry. She seemed elated, and I am happy for her. What distresses me, however, is the idea that Guyanese can only live comfortably if they land an oil sector job. It is well within the government’s capacity to pay our public servants well, and we in the Opposition must always remind Guyanese that before oil revenues were available we increased public servant salaries by 77% for those most in need. In only a few years since then, the country’s GDP has tripled, with the government’s budget growing in step. Clearly, there is money available to pay better salaries.
This year, supplemental budgets included, the government has spent approximately $900 billion dollars. For the government to proudly announce a salary adjustment amounting to only $7.5 billion, which is not even 1% of that monstrous total, is shameful. I believe that this is why social media was replete with cries of frustration and disgust. If today, with several hundred billion GYD of oil revenue flowing and multiple years of world-leading economic growth behind us, we can’t see a substantial public servant salary increase, the prospects for teachers, policemen and so many others are bleak indeed.
Mr. Bhagwandin goes on to cite salary adjustments made across different categories of workers, but was it so long ago that the Guyana Teachers’ Union expressed outrage that only a third of teachers would benefit from these adjustments? He even tries to defend the government by noting increases are above the inflation rate, but according to the US State Department this is not so. Its 2023 Investment Climate Statement for Guyana notes our inflation rate is expected to be 6.6%, above the 6.5% salary increase. This means public servants are worse off this year than they were last year, all while the country’s budget has soared.
What troubles me most about the PPP’s approach to salary increases, however, is that they seem to be unable to think about public servants in a dynamic way. The National Bureau of Economic Research, in an article entitled Police Pay and Performance, notes that police underperform not merely when pay is low, but when it is below expectations. With each successive year of surging oil revenues and production, and half-hearted attempts at increasing police pay, police are perpetually disappointed. It is easy to see this effect repeated across the public service, leading to low levels of motivation or even migration from Guyana altogether. There is a cost to stifling public servants, and we pay that cost each year the PPP refuses to offer fair pay.
On the other hand, police performance improves when salary demands are met, implying that substantial salary increases can help Guyana reduce crime rates swiftly. These improvements are easy to imagine across the board, and if public servants are specifically tasked with helping improve the efficiency of government systems (as we will task them when in office) the savings they generate will be substantial. The IMF frequently highlights the severe costs to our economy that come from inefficient public sector spending, and I raised this topic with them myself, when I met with them in Washington earlier this year. We talk about 50% and other large increases not merely because they sound exciting, but because we recognize that national expectations have changed and there is a significant benefit to meeting them. Until their wages are on track to become internationally competitive, public servants will be incentivized to underperform or leave, and governance can scarcely improve.
Finally, we must revisit the PPP’s pernicious policy of across the board increases, which benefit high earners the most. If a constitutional officeholder like Mr. Bhagwandin is earning $900,000 a month as a Public Procurement Commissioner, he will receive approximately $700,000 this Christmas. I offer him my congratulations and if I have misrepresented his salary (I rather suspect I have underestimated it) I apologize. What particularly alarms me, however, is that this means the lowest earning public servants will comparatively receive only approximately $65,000. This is asinine and unjust during this cost of living crisis, a crisis which has hit low-income Guyanese the hardest. Only a cruel government would refuse to take the time to thoughtfully structure these increases so that those in need benefit the most. Sadly, cruelty has become the PPP’s watchword. They continue to manufacture famine, in a time of plenty.
Sincerely,
Elson Low,
Economic and Youth Policy Adviser to the Leader
of the Opposition,
Opposition Oil and Gas Spokesperson